what constitutes a pre bancruptcy gift?

adrienne65

I declared myself bankrupt on 29th May 2018, and agreed a repayment schedule with my trustees which I have adhered to. My problem is that the trustees are asking me to identify payments I made to my daughter from my bank account from 2014 onwards, to my daughter. She was at university at the time and I was keeping her. I have been asked to identify the purpose of each payment and I am worried that the trustees are trying to identify these payments as gifts. Please can anyone point me to definitions of gifts somewhere so I can produce an informed response?
On occasions my daughter gave me money back, this was because she could see I was struggling. The trustees have asked was this an agreement between us and I am unsure how to respond, is there a particular legal implication here? I had no formal agreement, but when she sent me the money I did keep it, so in that sense we agreed I should keep the money.
The trustees have asked me for these payment details, to inform whether they send my daughter a letter before action asking her to repay the money. She cannot pay anything back as she is not in a position to do so financially, and we have shared her income details. If she is taken to court by the trustees will this affect her credit record?
I would really appreciate any advice. I thought the worst of my situation was behind me when I declared myself bankrupt but now they are pressurising my daughter I am extremely worried. I cant afford legal advice, the insolvency service are not able to help me as they are not legally trained. So any pointers would be really helpful. I have to respond by 4th Sept.
Thank you,

debt_doctor

Hi,

How much money are we talking about?

Did you consider the money as a gift or a loan?

If you thought of them as a loan, was there any agreed payments?

Did you provide these monies from you taking out further credit?

How do you see your daughters current financial position - Can she afford to pay it back? (I'm not saying she should)

Sorry for all the questions, but they are really relevant.

DD

silvercar

....payments I made to my daughter from my bank account from 2014 onwards, to my daughter. She was at university at the time and I was keeping her.

This makes me angry. The government expects parents to support their offspring through university, that is why they means test the parents to calculate the student loan for their offspring. Even then the student finance package is often not enough to support a student and parents often top up. Yet if the OR is looking to recover money that the parent gave to their student in line with this, it is contradictory to the hole student support system.
My initial response to the OR would be that you gave financial support in line with the government assumptions on means testing student support on parents' income. Any repayments from your daughter were gifts to help you out.
A second response maybe to see if bankruptcy looked likely in 2014 at the time you made a commitment to support your daughter. If it wasn't on the cards then the family financial decisions on supporting your daughter through uni were made when they were affordable.

adrienne65

Thank you for your empathy silvercar. Having agreed my repayment schedule and stuck to it I am mortified that they are now coming after my daughter. This is putting so much stress on me because of course I want to protect her from any demands for monies or court hearings.
The total amount I gave her over 4 years comes to 70k. One year of her studies was in Australia, not cheap! As I have a good income she received no state support. I never expected the money back so there was no agreement. Some of the money was from a mortgage extension but well before I needed to go bankrupt. I only went bankrupt because Promontoria demanded a guarantor payment when my husbands properties were sold to them by NAB. But that’s another story! I was offering to settle with Promontoria but they wouldn’t accept what was affordable for me so I had no option but to declare myself bankrupt. I was not defaulting on any of my bills and have the same job so was always solvent apart from the 175k guarantor payment.

Minkym00

On the face of it I don’t think you have too much to worry about. Your daughter was financially dependent on you, and you gave her the money for living expenses at a time when you were solvent and had no knowledge of future insolvency. Making these payments (don’t call them “gifts” in your correspondence with your trustees) have not contributed to your insolvency, so your conduct can’t be criticised in that respect.

Taken to the ultimate conclusion i.e. court, would a judge rule that she was liable to pay these back because she should have saddled herself with £70k of student loan debt when you had the financial means at the time to prevent it? I can’t see that happening.

I take it you have no funds for legal advice? As getting some case law in this area could be very useful.

adrienne65

I can’t afford legal advice unfortunately. I’m hopeful that a judge would see sense and nor order her to pay back money given for her to live whilst she studied. Do you know whether, if she was ordered to pay, this would affect her credit record?

Minkym00

In theory it could but it won’t get that far. There’s no point them spending money pursuing someone with no assets. I’ve seen plenty of attempted antecedent recoveries fail when the recipient has no means of returning funds.